Philip Morris Sacks Workers over Plan
Withdrawals

May 24, 2006 (PLANSPONSOR.com) - Philip Morris USA
has fired workers at its two US cigarette manufacturing
plants over allegations they were not completely honest in
their efforts to pull money from the company's profit-sharing
plan, according to a news media report.

The Charlotte Observer reported that 14 people have
been fired at the company’sConcord, North Carolina plant
for taking out hardship withdrawals for homes that were
not listed on the initial application or for using the
money for something other than buying the home they
initially intended to purchase.

Philip Morris spokesman Bill Phelps told the
newspaper that workers can be let go because of any
falsification, misstatement or omission of information
related to plan transactions. That message was part of a
May 4 memo posted on company bulletin boards that also
told employees the plans are subject to strict Internal
Revenue Service and Labor Department rules and
regulations, according to the news report.

Interviews and a list compiled by workers suggest
as many as 70 workers have been cut since last fall for
allegedly falsifying applications to make withdrawals.
TheConcord plant employs 2,600 people.

Fired workers told the Observer that neither Philip
Morris nor plan administrator Fidelity Investments raised
concerns until recently. Many of the withdrawals the
company cited as firing offenses were made several years
ago, documents obtained by the newspaper showed.

Employees can use hardship withdrawals to buy a
primary residence, to prevent eviction or foreclosure, or
for certain medical and educational purposes. An employee
is allowed to make a hardship withdrawal only after he or
she has received loans from the plan.

Several former workers said they were fired because
they applied for a withdrawal to buy one house and ended
up getting a different one. Others said they planned to
buy a house but later decided not to. They said they
tried to give the money back to Fidelity but were told
they could not.